Exhibit 99.1
WHOLE FOODS MARKET REPORTS FOURTH QUARTER RESULTS
SALES INCREASE 20%; COMPARABLE STORE SALES INCREASE 13.4%; AS PREVIOUSLY
ANNOUNCED, EARNINGS RESULTS INCLUDE HURRICANE KATRINA AND STOCK OPTION CHARGES;
COMPANY RAISES GUIDANCE FOR 2006 SALES GROWTH AND INCREASES 2010 SALES
GOAL TO $12 BILLION
AUSTIN, Texas, Nov. 9 /PRNewswire-FirstCall/ -- Whole Foods Market, Inc.
(Nasdaq: WFMI) today reported sales and earnings for the 12-week quarter and
52-week fiscal year ended September 25, 2005. For the fourth quarter, sales
increased 20% to $1.1 billion driven by 12% weighted average square footage
growth and comparable store sales growth of 13.4%. The Company estimates the
negative sales impact from Hurricane Katrina was in line with its previously
announced estimate of $5 million to $6 million. Sales in identical stores
(excluding three relocated stores) increased 11.9% for the quarter. For the
fiscal year, sales increased 22% to $4.7 billion driven by 13% weighted average
square footage growth and comparable store sales growth of 12.8%. Sales in
identical stores (excluding four relocated stores and two major store
expansions) increased 11.5% for the fiscal year. Comparable and identical store
sales exclude the Company's two stores in New Orleans and Metairie for the last
five weeks of the fourth quarter, as they were closed due to Hurricane Katrina.
"In fiscal 2005, we produced very strong operating results that exceeded our
own expectations and our initial guidance, and returned over $55 million to our
shareholders. We are confident in our growth potential and our ability to
execute on that growth potential, and as such we have increased our sales growth
guidance for next fiscal year to 18% to 21% and our 2010 sales goal from $10
billion to $12 billion," said John Mackey, chairman, chief executive officer,
and co-founder of Whole Foods Market. "We believe we will continue to produce
strong cash flow from operations and stock option exercises in excess of our
capital expenditure needs. As an EVA company that believes in maximizing returns
on invested capital to our shareholders, we are very pleased to announce today a
20% increase in our quarterly dividend to $0.30 per share, a special dividend of
$4.00 per share, and a $200 million four-year stock buyback program, along with
a two-for-one stock split."
Income before income taxes was $25.0 million for the quarter and
$237.1 million for the fiscal year. These results include pre-tax charges of
approximately $36.4 million for the quarter and $45.3 million for the fiscal
year as follows:
Pre-tax Charges 4Q05 FY05
- ------------------------------------------ -------------- --------------
Share-based compensation primarily related
to stock option vesting acceleration $ 18.2 million $ 19.9 million
Natural disaster costs 16.5 million 16.5 million
Adjustment to reflect early adoption of
lease accounting rule change 1.7 million 8.9 million
Total pre-tax charges $ 36.4 million $ 45.3 million
For the quarter, the Company's effective tax rate was approximately 64%, net
income was $9.1 million, diluted earnings per share were $0.13, and Economic
Value Added (EVA) declined $2.5 million to negative $1.8 million. The tax rate
was significantly higher than the Company's four-year average effective tax rate
of 40% primarily due to the non-deductible portion of the stock option
acceleration charge; however, in fiscal year 2006, the Company expects a return
to its historical annualized 40% tax rate. The decline in EVA was due to the
impact of Hurricane Katrina. For the fiscal year, the Company's effective tax
rate was approximately 43%, net income was $136.4 million, diluted earnings per
share were $1.98, and EVA improved $8.2 million to $25.8 million.
Fourth Quarter Results
In the fourth quarter, gross profit increased 68 basis points to 35.3% of
sales, and direct store expenses were basically flat at 26.0% of sales,
resulting in a 69 basis point increase in store contribution to 9.3% of sales.
For the 163 stores in the comparable store base, gross profit improved 90 basis
points to 35.5% of sales, and direct store expenses decreased 30 basis points to
25.6% of sales, resulting in a 119 basis point increase in store contribution to
9.9% of sales. General and administrative (G&A) expenses increased 27 basis
points to 3.3% of sales.
Capital expenditures in the quarter were $89 million of which $55 million
was for new store development. The Company produced cash flow from operations of
$77 million during the quarter and paid approximately $17 million to
shareholders in cash dividends. For the fiscal year, cash and cash equivalents,
including restricted cash, increased $124 million to approximately $345 million,
and total long-term debt decreased $152 million to approximately $19 million.
# of
Average Average NOPAT Comp
Store Returns for the Quarter Size Comps ROIC Stores
- -------------------------------- ------- ------- ----- ------
Stores over 11 years old 29,200 8.6% 70% 38
Stores between eight and
11 years old 28,600 11.8% 71% 33
Stores between five and
eight years old 32,200 12.7% 53% 38
Stores between two and
five years old 33,400 13.2% 26% 38
Stores less than
two years old
(including relocations) 44,400 33.6% 8% 16
Stores in comparable
store base 32,200 13.4% 40% 163
Stores open at the end
of the fourth quarter 33,200 33% 173
Share-Based Compensation
In December 2004, the Financial Accounting Standards Board ("FASB")
finalized Statement 123R, "Share-Based Payment," which requires all companies to
expense share-based payments, including stock options, at fair value. As such,
the Company will begin expensing options in the first quarter of fiscal year
2006. Though not retroactive, the charge to earnings resulting from this rule
includes the impact of stock options granted in prior years, since the expense
is recognized over the vesting period of the options, which for the Company has
been four years. Even if the Company never granted another option after today,
it would still have stock option expense until all past option grants were fully
vested. Therefore, as previously announced, in order to prevent this "overhang"
from past option grants impacting future results, the Company accelerated the
vesting of all outstanding stock options on September 22, 2005. The Company
incurred an $18.0 million share-based compensation charge in the fourth quarter,
primarily a non-cash charge related to this accelerated vesting of options. In
addition, the Company's effective tax rate for the quarter was significantly
higher than its historical rate primarily due to the non-deductible portion of
the stock option acceleration charge. The share-based compensation expense
related to the accelerated vesting of options was higher than the Company's $10
million to $15 million previous estimate primarily due to the
higher-than-expected closing stock price on the date of acceleration.
Natural Disaster Costs
As previously announced, the Company has two stores in the New Orleans area
which were damaged by and closed due to Hurricane Katrina, and accordingly the
Company recorded a charge in the fourth quarter for related estimated net
losses. The main components of the $16.5 million charge were estimated impaired
assets of approximately $12.2 million, estimated inventory losses of
approximately $2.2 million, salaries and relocation allowances for displaced
Team Members and other costs of approximately $3.7 million, plus a $1 million
special donation to the American Red Cross, less accrued insurance proceeds of
approximately $2.6 million.
Adjustment for Early Adoption of Lease Accounting Rule Change
The FASB recently finalized its Staff Position on accounting for rental
costs incurred during the construction period which requires construction-period
rentals to be recognized as expense for reporting periods beginning after
September 15, 2005. The rule permits retrospective application of this
requirement to previously reported periods and allows early adoption for
financial statements not yet issued. As previously announced, the Company has
elected to early adopt this rule, allowing current-year financial statements to
be reported on the same basis as will be required in the future, and will
retrospectively apply this rule to its 2005 Form 10-K results so that all
year-over-year amounts are comparable. The following table shows the impact of
the lease accounting rule change on our fiscal year 2005 results, and included
with this press release are adjusted quarters for fiscal years 2004 and 2005.
Impact of
Lease
Accounting
Change 1Q05 2Q05 3Q05 4Q05 FY05
- ------------------ ------------- ------------- ------------- ------------- -------------
Pre-opening
and relocation
expense $ 3,466,000 $ 2,684,000 $ 2,755,000 $ 2,291,000 $ 11,196,000
Direct store
expenses
(depreciation) (664,000) (521,000) (539,000) (594,000) (2,318,000)
Net pre-tax
impact $ 2,802,000 $ 2,163,000 $ 2,216,000 $ 1,697,000 $ 8,878,000
New Store Development
In the fourth quarter, the Company opened five new stores in Baton Rouge,
LA; Columbus, OH; Denver, CO; Boston, MA; and Omaha NE, ending the quarter with
175 stores (including two Louisiana stores which were temporarily closed)
totaling approximately 5.8 million square feet. So far in the first quarter of
fiscal year 2006, the Company has opened four new stores in Atlanta, GA;
Jericho, NY; Palm Beach Gardens, FL; and West Hartford CT, and plans to open one
additional store in Denver, CO.
The Company is also pleased to announce that its Metairie, LA store near New
Orleans, which was closed following Hurricane Katrina, has recently reopened for
business on a limited basis. While the store will require a complete
re-building, the Company has opened an 11,000 square foot "store within a store"
in order to provide food to the community while simultaneously rebuilding the
perimeter of the store, which the Company hopes to complete over the next three
to six months. Also, the Company is now offering pick-up service at its urban
New Orleans store and hopes to re-open that store within the next three to six
months as well.
The Company continues to add to its store development pipeline with the
recent signing of nine new store leases representing a total of approximately
549,000 square feet which are as follows: Chandler, AZ (60,000 s.f.); Orlando,
FL (50,000 s.f.); Eugene, OR (52,000 s.f.); Tarzana (Los Angeles suburb), CA
(56,000 s.f.); Plymouth Meeting (Philadelphia suburb), PA (65,000 s.f.); Dallas,
TX (80,000 s.f.); Reading (Boston suburb), MA (61,000 s.f.); London, U.K.
(75,000 s.f.); and Connecticut (50,000 s.f.). The following table provides
additional information about the Company's current store development pipeline.
Store Development Pipeline 11/9/05 11/10/04 % Change
- -------------------------------------- ------------ ------------ ------------
Number of stores in development 64 53 23%
Average size (gross square feet) 55,000 49,000 13%
As a percentage of existing store
average size 164% 155% ---
Total square footage under development 3,600,000 2,600,000 40%
As a percentage of existing
square footage 60% 50% ---
Growth Goals for Fiscal Year 2006 and Beyond
As shown in the table below, for the last five years, the Company has
produced average sales growth, comparable store sales growth, and weighted
average square footage growth of 21%, 11% and 14%, respectively. Based on the
Company's strong sales trends over the last few years and its 3.6 million square
feet under development, the Company expects to continue to produce similar
results on average over the next five years and is therefore raising its 2010
sales goal from $10 billion to $12 billion.
Five-Year
Historical Performance FY01 FY02 FY03 FY04 FY05 Average
- ----------------------- ---------- ---------- ---------- ---------- ---------- ----------
Sales growth 23.6% 18.4% 17.0% 22.8% 21.6% 20.7%
Comparable store sales
growth 9.2% 10.0% 8.6% 14.9% 12.8% 11.1%
Two-year comps
(sum of two years) 17.8% 19.2% 18.6% 23.5% 27.8% 21.4%
Weighted average square
footage growth 17% 17% 11% 9% 13% 14%
For fiscal year 2006, the Company is raising its guidance for sales growth
to 18% to 21% from a previously stated range of 15% to 20%. The Company expects
comparable store sales growth of 8% to 11% and weighted average square footage
growth in line with its 14% average.
The Company has produced very consistent results as a percentage of sales
over time for the line items shown below. The Company continues to believe that
it will produce earnings growth through sales growth rather than through
significant operating margin leverage and that these historical results are the
best indicator of future results; however, due to fluctuations in the number of
new store openings each year and quarter over quarter, there could be some
negative impact on store contribution, as new stores generally have lower gross
margins and higher direct store expenses than more mature stores.
Five-Year
Historical Performance FY01 FY02 FY03 FY04 FY05 Average
- ----------------------- ---------- ---------- ---------- ---------- ---------- ----------
Gross profit 34.7% 34.6% 34.2% 34.7% 35.1% 34.7%
Direct store expenses 25.3% 25.2% 25.2% 25.5% 25.5% 25.4%
G&A 3.6% 3.6% 3.2% 3.1% 3.2% 3.3%
The Company expects pre-opening and relocation costs for fiscal year 2006 to
be slightly higher than the amount incurred in fiscal year 2005. For fiscal year
2006, this includes approximately $6 million to $7 million in accelerated
depreciation and closure costs related primarily to stores and facilities
scheduled for relocation in fiscal year 2007 and approximately $18 million in
pre-opening rent, of which more than half is related to new stores expected to
open in fiscal year 2007. Pre-opening rent expensed during the development
period is primarily non-cash since the majority of our leases require minimal,
if any, rent to be paid until opening of the store. The Company expects average
pre-opening costs per new store in the range of $1.7 million to $2.0 million.
The Company's restated average pre-opening costs per store have increased over
the past several years and are expected to continue to increase in the future
due mainly to increases in the average store size and number of prepared foods
venues, and to an increase in our internal capitalization thresholds resulting
in the expensing of smallwares that were previously capitalized. On a quarterly
basis, the Company expects pre-opening and relocation expense to be fairly even
throughout the first three quarters of fiscal year 2006 and then ramp up in the
fourth quarter due to an anticipated higher number of new store openings in
fiscal year 2007.
Capital expenditures are expected to be in the range of $340 million to $360
million of which approximately 60% is related to new stores.
The Company expects to return to its historical annualized 40% tax rate in
fiscal year 2006. Excluding the $16.5 million in costs relating to Hurricane
Katrina in fiscal year 2005 and share-based compensation expense in fiscal years
2005 and 2006, and using a 40% tax rate in both years, the Company expects
diluted earnings per share growth to be slightly less than the Company's
increased guidance for sales growth of 18% to 21%. This is due to an expected
increase in diluted shares outstanding resulting from an anticipated increase in
stock option exercises from the accelerated vesting. The expected fully or
partially offsetting impact of higher investment income on the increased cash
balance will not be realized because of the Company's announced intent to pay
approximately $363 million in cash dividends to shareholders in fiscal year
2006.
The Company will begin expensing share-based compensation in the first
quarter of fiscal year 2006; however, the impact on diluted earnings per share
is expected to be immaterial in the first and second quarters, as the Company's
annual grant date at which the majority of options are granted is not until May.
The Company is not forecasting the expense for the second half of the year as it
will largely depend on the Company's stock price at the grant date; however, the
Company has stated its current intention is to keep its broad-based stock option
program in place but, going forward, limit the number of shares granted in any
one year so that quarterly net income dilution from share-based compensation
expense does not exceed 10%. The Company believes this strategy is best aligned
with its stakeholder philosophy because it limits future earnings dilution from
options while at the same time retains the broad-based stock option plan which
it believes is important to team member morale, its unique corporate culture and
its success.
About Whole Foods Market: Founded in 1980 in Austin, Texas, Whole Foods
Market(R) is a Fortune 500 company and the largest natural and organic foods
retailer. The Company had sales of $4.7 billion in fiscal year 2005 and
currently has 179 stores in the United States, Canada and the United Kingdom.
The following constitutes a "Safe Harbor" statement under the Private
Securities Litigation Reform Act of 1995. Except for the historical information
contained herein, the matters discussed in this press release are
forward-looking statements that involve risks and uncertainties, which could
cause our actual results to differ materially from those described in the
forward looking statements. These risks include but are not limited to general
business conditions, the timely development and opening of new stores, the
impact of competition, and other risks detailed from time to time in the
Company's SEC reports, including the report on Form 10-K/A Amendment No. 2 for
the fiscal year ended September 26, 2004. The Company does not undertake any
obligation to update forward-looking statements.
The Company will host a conference call today to discuss this earnings
announcement at 4:00 p.m. CT. The dial in number is 1-800-540-0559 and the
conference ID is "Whole Foods." A simultaneous audio webcast will be available
at www.wholefoodsmarket.com .
WHOLE FOODS MARKET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Twelve weeks ended Fifty-two weeks ended
September 25, September 26, September 25, September 26,
2005 2004 2005 2004
=====================================================================================================================
Sales $ 1,115,067 $ 927,306 $ 4,701,289 $ 3,864,950
Cost of goods sold and occupancy costs 721,767 606,537 3,048,870 2,523,816
- ---------------------------------------------------------------------------------------------------------------------
Gross profit 393,300 320,769 1,652,419 1,341,134
Direct store expenses 289,485 240,800 1,199,870 986,040
- ---------------------------------------------------------------------------------------------------------------------
Store contribution 103,815 79,969 452,549 355,094
General and administrative expenses 36,202 27,597 149,364 119,800
Share-based compensation 18,154 - 19,896 -
Pre-opening and relocation costs 11,394 5,569 37,035 18,648
Natural disaster costs 16,521 - 16,521 -
- ---------------------------------------------------------------------------------------------------------------------
Operating income 21,544 46,803 229,733 216,646
Other income (expense):
Interest expense (10) (1,593) (2,223) (7,249)
Investment and other income 3,448 1,707 9,623 6,456
- ---------------------------------------------------------------------------------------------------------------------
Income before income taxes 24,982 46,917 237,133 215,853
Provision for income taxes 15,922 18,767 100,782 86,341
- ---------------------------------------------------------------------------------------------------------------------
Net income $ 9,060 $ 28,150 $ 136,351 $ 129,512
=====================================================================================================================
Basic earnings per share $ 0.13 $ 0.45 $ 2.10 $ 2.11
=====================================================================================================================
Weighted average shares outstanding 67,486 62,339 65,045 61,324
=====================================================================================================================
Diluted earnings per share $ 0.13 $ 0.43 $ 1.98 $ 1.98
=====================================================================================================================
Weighted average shares outstanding, diluted basis 71,035 68,613 69,975 67,727
=====================================================================================================================
Dividends per share $ 0.25 $ 0.15 $ 0.94 $ 0.60
=====================================================================================================================
A reconciliation of the numerators and denominators of the basic and diluted
earnings per share calculations follows (in thousands):
Twelve weeks ended Fifty-two weeks ended
September 25, September 26, September 25, September 26,
2005 2004 2005 2004
=====================================================================================================================
Net income (numerator for basic earnings per share) $ 9,060 $ 28,150 $ 136,351 $ 129,512
Interest on 5% zero coupon convertible subordinated
debentures, net of income taxes - 1,099 2,539 4,697
- ---------------------------------------------------------------------------------------------------------------------
Adjusted net income (numerator for diluted earnings
per share) $ 9,060 $ 29,249 $ 138,890 $ 134,209
=====================================================================================================================
Weighted average common shares outstanding (denominator
for basic earnings per share) 67,486 62,339 65,045 61,324
Potential common shares outstanding:
Assumed conversion of 5% zero coupon convertible
subordinated debentures - 3,280 1,707 3,281
Assumed exercise of stock options 3,549 2,994 3,223 3,122
- ---------------------------------------------------------------------------------------------------------------------
Weighted average common shares outstanding and
potential additional common shares outstanding
(denominator for diluted earnings per share) 71,035 68,613 69,975 67,727
=====================================================================================================================
Basic earnings per share $ 0.13 $ 0.45 $ 2.10 $ 2.11
=====================================================================================================================
Diluted earnings per share $ 0.13 $ 0.43 $ 1.98 $ 1.98
=====================================================================================================================
WHOLE FOODS MARKET, INC.
CONSOLIDATED BALANCE SHEETS
September 25, 2005 and September 26, 2004
(In thousands)
ASSETS 2005 2004
=====================================================================================================================
Current assets:
Cash and cash equivalents $ 308,524 $ 194,747
Restricted cash 36,922 26,790
Trade accounts receivable 66,682 64,972
Merchandise inventories 174,848 152,912
Deferred income taxes 39,588 29,974
Prepaid expenses and other current assets 45,965 16,702
- ---------------------------------------------------------------------------------------------------------------------
Total current assets 672,529 486,097
Property and equipment, net of accumulated depreciation and amortization 1,054,605 873,397
Goodwill 112,476 112,186
Intangible assets, net of accumulated amortization 21,990 24,831
Deferred income taxes 22,452 4,193
Other assets 5,244 20,302
- ---------------------------------------------------------------------------------------------------------------------
Total assets $ 1,889,296 $ 1,521,006
=====================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY 2005 2004
=====================================================================================================================
Current liabilities:
Current installments of long-term debt and capital lease obligations $ 5,932 $ 5,973
Trade accounts payable 103,348 90,751
Accrued payroll, bonus and other benefits due team members 126,981 100,536
Dividends payable 17,208 9,361
Other current liabilities 164,914 128,329
- ---------------------------------------------------------------------------------------------------------------------
Total current liabilities 418,383 334,950
Long-term debt and capital lease obligations, less current installments 12,932 164,770
Deferred rent liability 91,775 70,067
Other long-term liabilities 530 1,581
- ---------------------------------------------------------------------------------------------------------------------
Total liabilities 523,620 571,368
- ---------------------------------------------------------------------------------------------------------------------
Shareholders' equity:
Common stock, no par value, 300,000 and 150,000 shares authorized; 68,009 and
62,771 shares issued; 67,954 and 62,407
shares outstanding in 2005 and 2004, respectively 874,972 535,107
Accumulated other comprehensive income 4,405 2,053
Retained earnings 486,299 412,478
- ---------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 1,365,676 949,638
- ---------------------------------------------------------------------------------------------------------------------
Commitments and contingencies
- ---------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 1,889,296 $ 1,521,006
=====================================================================================================================
WHOLE FOODS MARKET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Fifty-two weeks ended
September 25, September 26,
2005 2004
- ---------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 136,351 $ 129,512
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 133,759 115,157
Loss on disposition of assets 15,886 5,769
Share-based compensation 19,135 -
Deferred income tax expense (benefit) (27,873) (682)
Tax benefit related to exercise of employee stock options 62,643 35,583
Interest accretion on long-term debt 4,120 7,551
Deferred rent 16,080 11,109
Other 1,317 (1,133)
Net change in current assets and liabilities:
Trade accounts receivable (2,027) (19,158)
Merchandise inventories (21,486) (27,868)
Prepaid expense and other current assets (4,151) (2,940)
Trade accounts payable 12,597 12,515
Accrued payroll, bonus and other benefits due team members 26,445 29,646
Other accrued expenses 38,023 35,279
- ---------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 410,819 330,340
- ---------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Development costs of new store locations (207,792) (156,728)
Other property, plant and equipment expenditures (116,318) (109,739)
Increase in restricted cash (10,132) (26,790)
Change in notes receivable 13,500 (13,500)
Payment for purchase of acquired entities, net of cash acquired - (18,873)
Other investing activities (1,500) 1,332
- ---------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (322,242) (324,298)
- ---------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid (54,683) (27,728)
Issuance of common stock 85,816 59,518
Payments on long-term debt and capital lease obligations (5,933) (8,864)
- ---------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 25,200 22,926
- ---------------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents 113,777 28,968
Cash and cash equivalents at beginning of period 194,747 165,779
- ---------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 308,524 $ 194,747
=====================================================================================================================
=====================================================================================================================
Supplemental disclosure of cash flow information:
Interest paid $ 1,063 $ 2,127
Federal and state income taxes paid $ 74,706 $ 60,372
Non-cash transactions:
Common stock issued in connection with acquisition $ - $ 16,375
Conversion of convertible debentures into common stock $ 147,794 $ 293
=====================================================================================================================
WHOLE FOODS MARKET, INC.
CONSOLIDATED QUARTERLY STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
January 16, April 10, July 3, September 25,
FISCAL YEAR 2005 2005 2005 2005 2005
=====================================================================================================================
Sales $ 1,368,328 $ 1,085,158 $ 1,132,736 $ 1,115,067
Cost of goods sold and occupancy costs 895,486 697,686 733,931 721,767
- ---------------------------------------------------------------------------------------------------------------------
Gross profit 472,842 387,472 398,805 393,300
Direct store expenses 348,380 276,291 285,714 289,485
- ---------------------------------------------------------------------------------------------------------------------
Store contribution 124,462 111,181 113,091 103,815
General and administrative expenses 40,401 34,773 37,988 36,202
Share-based compensation - 22 1,720 18,154
Pre-opening and relocation costs 6,599 10,265 8,777 11,394
Natural disaster costs - - - 16,521
- ---------------------------------------------------------------------------------------------------------------------
Operating income 77,462 66,121 64,606 21,544
Other income (expense):
Interest expense (1,708) (342) (163) (10)
Investment and other income 1,194 2,113 2,868 3,448
- ---------------------------------------------------------------------------------------------------------------------
Income before income taxes 76,948 67,892 67,311 24,982
Provision for income taxes 30,778 27,158 26,924 15,922
- ---------------------------------------------------------------------------------------------------------------------
Net income $ 46,170 $ 40,734 $ 40,387 $ 9,060
=====================================================================================================================
- ---------------------------------------------------------------------------------------------------------------------
Basic earnings per share $ 0.74 $ 0.63 $ 0.61 $ 0.13
=====================================================================================================================
Weighted average shares outstanding 62,794 64,751 65,899 67,486
=====================================================================================================================
Diluted earnings per share $ 0.69 $ 0.59 $ 0.58 $ 0.13
=====================================================================================================================
Weighted average shares outstanding, diluted basis 69,013 69,544 70,373 71,035
=====================================================================================================================
Dividends per share $ 0.19 $ 0.25 $ 0.25 $ 0.25
=====================================================================================================================
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
January 18, April 11, July 4, September 26,
FISCAL YEAR 2004 2004 2004 2004 2004
=====================================================================================================================
Sales $ 1,118,148 $ 902,141 $ 917,355 $ 927,306
Cost of goods sold and occupancy costs 733,721 582,597 600,961 606,537
- ---------------------------------------------------------------------------------------------------------------------
Gross profit 384,427 319,544 316,394 320,769
Direct store expenses 282,596 229,995 232,649 240,800
- ---------------------------------------------------------------------------------------------------------------------
Store contribution 101,831 89,549 83,745 79,969
General and administrative expenses 35,869 28,783 27,551 27,597
Pre-opening and relocation costs 4,073 4,040 4,966 5,569
- ---------------------------------------------------------------------------------------------------------------------
Operating income 61,889 56,726 51,228 46,803
Other income (expense):
Interest expense (2,478) (1,859) (1,319) (1,593)
Investment and other income 1,464 1,503 1,782 1,707
- ---------------------------------------------------------------------------------------------------------------------
Income before income taxes 60,875 56,370 51,691 46,917
Provision for income taxes 24,350 22,548 20,676 18,767
- ---------------------------------------------------------------------------------------------------------------------
Net income $ 36,525 $ 33,822 $ 31,015 $ 28,150
=====================================================================================================================
- ---------------------------------------------------------------------------------------------------------------------
Basic earnings per share $ 0.61 $ 0.55 $ 0.50 $ 0.45
=====================================================================================================================
Weighted average shares outstanding 60,309 61,035 61,951 62,339
=====================================================================================================================
Diluted earnings per share $ 0.57 $ 0.52 $ 0.47 $ 0.43
=====================================================================================================================
Weighted average shares outstanding, diluted basis 66,634 67,579 68,446 68,613
=====================================================================================================================
Dividends per share $ 0.15 $ 0.15 $ 0.15 $ 0.15
=====================================================================================================================
WHOLE FOODS MARKET, INC.
NON-GAAP FINANCIAL MEASURES (unaudited)
(In thousands)
In addition to reporting financial results in accordance with generally accepted
accounting principles, or GAAP, the Company provides information regarding
Economic Value Added ("EVA") in the press release as additional information
about its operating results. This measure is not in accordance with, or an
alternative to, GAAP. The Company's management believes that this presentation
provides useful information to management, analysts and investors regarding
certain additional financial and business trends relating to its results of
operations and financial condition. In addition, management uses this measure
for reviewing the financial results of the Company and for incentive
compensation and capital planning purposes. The following is a tabular
reconciliation of this non-GAAP financial measure to GAAP net income, which the
Company believes to be the most directly comparable GAAP financial measure.
Twelve weeks ended Fifty-two weeks ended
September 25, September 26, September 25, September 26,
EVA 2005 2004 2005 2004
=====================================================================================================================
Net income $ 9,060 $ 28,150 $ 136,351 $ 129,512
Provision for income taxes 15,922 18,767 100,782 86,341
Interest expense and other 29,424 3,186 38,832 11,954
- ---------------------------------------------------------------------------------------------------------------------
NOPBT 54,406 50,103 275,965 227,807
Income taxes (40%) 21,762 20,041 110,386 91,123
- ---------------------------------------------------------------------------------------------------------------------
NOPAT 32,644 30,062 165,579 136,684
Capital Charge 34,484 29,435 139,793 119,101
- ---------------------------------------------------------------------------------------------------------------------
EVA $ (1,840) $ 627 $ 25,786 $ 17,583
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Contact: Cindy McCann
VP of Investor Relations
512.542.0204
SOURCE Whole Foods Market, Inc.
-0- 11/09/2005
/CONTACT: Cindy McCann, VP of Investor Relations of
Whole Foods Market, Inc., +1-512-542-0204/
/Web site: http://www.wholefoodsmarket.com /